SolvedDT9203 | Double Taxation Relief Manual: Hong Kong: treaty summary
From HM Revenue & Customs · Double Taxation Relief Manual
The table summarises the provisions of the treaty as they relate to income beneficially owned by UK residents. The rate shown is the ‘treaty rate’ and does not reflect taxes chargeable under domestic law before relief is given under the provisions of the treaty. The ‘treaty rate’ is the maximum rate at which Hong Kong is permitted to tax income in the relevant categories under the treaty. Rates chargeable under domestic law may be higher or lower.
In all cases other conditions for relief (e.g. beneficial ownership) will have to be met before relief is due under the treaty. The text of the treaty itself should be consulted for the full details. The text of the treaty can be found on gov.uk.
| Subject | Comments | Article |
|---|---|---|
| Portfolio dividends | 0% (Note 1) | 10 |
| Dividends on direct investments | 0% (Note 1) | 10 |
| Conditions for lower rate on dividends on direct investments | Dividends from a property investment vehicle paid to a pension scheme and all dividends other than those paid by a property investment vehicle are exempt from tax in the source state | 10 |
| Property income dividends | 15% | 10 |
| Interest | 0% (Note 2) | 11 |
| Royalties | 3% | |
| Government pensions | Taxable only in the source state | 17 |
| Other pensions | Taxable only in the source state | 17 |
| Arbitration | Yes | 23 |
Note 1: Dividends are taxable in the source state at a rate of 15% if they are payable by a property investment vehicle, such as a UK Real Estate Investment Trust, unless the beneficial owner is a pension scheme.
The exemptions provided by the agreement are not given if the dividend is effectively connected (see INTM153110 fifth sub-paragraph) with a permanent establishment which the UK resident recipient has in Hong Kong.
Note 2: Exemption from source state taxation where the beneficial owner of the interest is an individual, a company whose shares are regularly traded on a stock exchange or a bank which is not connected to the payer of the interest.